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liquidators breathe a sigh of relief

18 October 2013

What happens when liquidators of a company sell assets that another party claims to own? In this case, it was £14million worth of assets.

In the recent case of Euromex Ventures Ltd, Mr Justice Newey had to decide whether the liquidators were liable to the claimants for unlawful conversion when the liquidators sold valuable equipment and other items located in the premises of the company in liquidation.

The judge held that the documents the claimants relied upon as proof of ownership were “not genuine” but, in any event, the liquidators were protected by s.234 of the Insolvency Act 1986 as they had reasonably believed that they were entitled to seize and dispose of the disputed assets.

This case serves as a powerful reminder of the court’s approach to the protection afforded to liquidators under s.234 of the Insolvency Act 1986. The liquidators concerned will have no doubt breathed a sigh of relief at having defeated a £14million claim.

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